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"Now not all people are dumb and irrational, but enough are to make the world an unpleasant place (i.e wars, famine)
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<p>Once again, the underlying assumption of this is that the government is not full of self-serving irrational people. No matter how complex and careful your checks are, they mean nothing if men is inherently irrational; the checks will always be pushed aside.</p>
<p>A majority vote does not approximate rationality in any sense. Rationality would be not deliberately inflating currencies, stealing from people based on their wealth, and killing people (death penalties). Furthermore, there are two other problems with majority rule: one is that the best solution to the problem can never be known without a price system as feedback. How can you know if the huge highway or dam you just built with taxes was the best allocation of resources? You can't. The other problem is that people are not careful with money that isn't theirs. Gave a pricey no-bid contract to your buddies? No problem, you are not personally accountable (in the market, your finances are tied to the decisions you make and hence you are fully accountable).</p>
<p>Anarchy can full well have checks and balances. For instance, you don't like to get robbed so you hire a private defense agency which protects and insures you from theft. If their services are mediocre, you can cancel at anytime rather than keep feeding the bad system unlike a government.</p>
<p>FYI, the credit crisis was due to market speculation about continuously rising housing prices. The prices of houses only rose for so long because of a credit bubble fueled by the Fed's monetary manipulations. By no means is the credit crisis a fault of the market; it stems directly from the government enforcing a monopoly on currency by the Fed.</p>
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In an anarchy, these sort of instances would be the way of life because there would be no way to enforce right or wrong.
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<p>Those irresponsible investors are not bailed out and the market corrects itself. That is the way to get rid of bad investments. </p>
<p>Just as you buy services and goods, you can buy protection services on the market so right and wrong can be enforced.</p>
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Also there wouldn't be a clear cut definition of what right or wrong is because it is ambiguous and relative as it applies to different people.
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<p>Again, this argument assumes that cultural and societal norms are irrelevant when a government exists. This is simply not true since you can clearly see that these sorts of oddities are still widespread in certain places with governments (e.g. the middle east).</p>